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A BC MLA is urging the government to move faster on passing franchise law reforms to protect franchisees.
Proposed legislation would afford greater protections to franchisees

A British Columbia legislator is calling on the provincial government to fast-track its proposed franchise law, according to Business in Vancouver. The proposed legislation recently finished a consultation process in December, but shows little sign of being passed into law this legislative session. The proposal would significantly expand disclosure requirements for people buying a franchise and would bring British Columbia’s franchise law more in line with other North American jurisdictions.
Proposal in development

The need for a new franchise law is not new and the current proposal has been in development for years. Following extensive consultations with industry insiders, the British Columbia Law Institute released a draft for a new law in March of last year. That draft legislation has been subject to further consultations with industry groups and stakeholders, which wrapped up in December.

The provincial government says it is reviewing the results of those consultations before deciding what action to take next. With the government reviewing the results of the consultation process, it appears unlikely that the proposal will be passed during the current legislative session. One MLA, however, believes the government needs to act faster on the proposal, describing the current lack of protections afforded to franchisees as leading to an “urgent” situation.

Disclosure requirements

There is generally strong support for a new franchise law in British Columbia. If passed, the legislation would require greater disclosure by the franchisor when entering into an agreement with a potential franchisee. According to the Financial Post, the law would encourage prospective franchisees to seek out independent legal and financial advice that could protect them from potential unforeseen consequences later on. The proposed law also gives franchisees more rights when disputes arise with a franchisor.

Perhaps just as significant is the fact that the legislation would largely reflect laws currently in place in the United States and a number of other Canadian provinces. Proponents of the law point out that bringing British Columbia franchise law in line with the laws of other jurisdictions benefits both franchisors and franchisees by guaranteeing consistency across international and provincial boundaries. With greater legal consistency, all parties to the franchise contract will be able to operate in a more predictable environment that should be beneficial to small business as a whole.

Legal guidance

While it remains to be seen when the province’s franchise law will be reformed, for current business owners this story should serve as a reminder of why legal advice is so important when running a business. An experienced lawyer can provide the peace of mind that business owners need to ensure that their business is in full compliance with the law and thereby avoid any unwanted surprises that can arise due to a lack of legal preparation.